What do capitalists earn?

Yesterday, I asked the question, who are the capitalists? My answer was, they’re the tiny group of people (4500 or so individuals) who sit on the boards of directors of the nation’s largest corporations.

I also argued, capitalists appropriate, but don’t keep, the surplus. Instead, as members of corporate boards, they receive a small fee for attending meetings. They distribute the surplus to others, both inside and outside the enterprise

Now, according to the Wall Street Journal, that seems to be changing. More and more capitalists are distributing to themselves shares of the surplus.

The old model was the one that is still employed by Berkshire Hathaway:

A few companies pay their directors little or nothing. In 2014, Berkshire Hathaway Inc.directors got $900 for attending an in-person meeting, plus $300 each for conference calls, and another $4,000 a year for those serving on the board’s audit committee; no director received more than $6,700 for the year.

Berkshire Hathaway CEO Warren Buffett has warned that directors dependent on board fees aren’t truly independent. His 2014 letter to shareholders makes Berkshire’s low pay a selling point for the board.

“None took the job for the money,” he wrote. “They receive their rewards instead through ownership of Berkshire shares and the satisfaction that comes from being good stewards of an important enterprise.”

But, apparently, that model is being overturned. The median pay of an S&P 500 board member is now $255,000 a year. Some directors receive four or five times as much. The total annual pay for all those directors is about $1.4 billion.

At Regeneron Pharmaceuticals Inc., directors each made at least $1.7 million in its last reported year, and Chairman P. Roy Vagelos made $20.5 million in cash, stock and benefits. Median director pay at software maker Salesforce.com Inc. reached $655,000 in its most recently reported year. At Goldman Sachs Group Inc., it was $594,000, or more than twice the median pay for S&P 500 companies.

Their compensation may be changing. They’re now distributing to themselves a larger share of the surplus.

But it is still the case that the members of the boards of directors of the nation’s largest corporations are the personification of capital. They are the capitalists.